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5 Reasons Your Budget Isn't Working and How to Fix it

Budgeting can be a challenging task, and many individuals find themselves struggling to maintain an effective budget. If terms like "complicated," "confusing," or "time-consuming" resonate with you, you're not alone. This article will address common budgeting problems and provide practical solutions to help you regain control of your finances.






Budget Problem #1: You Don’t Know Your Goal


You’ve heard of the saying, “keep your eyes on the prize.” But what if you’ve never taken the time to think about what the prize should be? When budgeting gets hard, as it inevitably will, the motivation to stick to your budget fizzles fast if the reason why you’re budgeting isn’t top of mind.


By identifying the specific financial goal(s) that will result in your ideal vision for the future, you’ll feel less deprived when you have to consider the sacrifices you’re making in the present. You’ll also have a standard by which you can measure the success of your budget. So to keep your eyes on the prize, gain clarity about your ultimate financial goals by asking yourself the big questions:


  • Why am I trying to get better with my finances? Why am I budgeting?

  • What do I care about, and what kind of budget do I need to get there?

  • What does the future me need and want, and how can my current budget contribute to my future lifestyle?

I encourage you to write the answers to these questions down on paper and post them somewhere you can see them. Whether it’s your refrigerator, your bathroom wall, or your office space doesn’t matter. Simply posting your goals somewhere you’ll see them often is the best way to keep them top of mind.


Defining your prize is also about making your money work for you. Give every dollar a job. If every dollar has a job, then you prioritize those dollars by determining how they will be spent.


You put a lot of intention into making your money. Put as much intention into defining your goals, creating your budget, and maintaining your commitment to that budget to meet those goals.


Budget Problem #2: You’ve Overcomplicated Your Budget

Overcomplication can be a form of procrastination. Sometimes, the initial high of creating a budget is addictive, especially with all the bells and whistles available on budgeting apps and templated spreadsheets out there. If your budget takes too much time to set up, then it will most likely take too much time to manage.


Instead, simplify your budget (do not create too many categories or sub accounts initially) and remind yourself that it doesn’t have to be this way forever. You may not initially get all the spending data you want, but you will get the data that helps you stick to a reasonable budget-management plan: data that will help you take action.




Budget Problem #3: You Don’t Check Your Budget Enough

The more frequently you check your budget, the easier it is to tailor your habits. Not to mention, if you’re exceeding your goals in one spending category, then you can permit yourself to indulge more in another. When you put off budget-checking for too long, it becomes harder to see expense patterns and nearly impossible to course-correct. It’ll also take longer to maintain your budget each time you sit down to do it.


Procrastination—that is, waiting until the end of the week or month to check your budget—can be overwhelming. Instead, make budgeting a small part of your daily routine. (It shouldn’t take more than five to ten minutes a day.)


Budget Problem #4: Your Expectations Are Unrealistic

As you consider making changes to your budget, it’s important to manage your expectations. While drastic changes to your spending may appear to have an immediate and impressive impact, you’ll likely find that they aren’t realistic. Commit to sustainable changes that will have a greater impact in the long run.


For example, while slashing your allowance in the “eating out” category by 50 percent might accelerate your savings goals, a slow-and-steady reduction of 5-10 percent per month might be more suited to your current lifestyle. Once you’ve mastered a few months with the modest target, consider making additional incremental changes. It’s easier to follow through with realistic plans. Plus, if you become resentful of your budget, you are more likely to abandon it.


Take pride in the plan you’ve made for yourself, and make adjustments as needed and desired. These adjustments are at the heart of budgeting.


Budget Problem #5: You Spend More Than You Make

Age Your Money:

  • Understand your cash inflow, outflow, and overall budget.

  • Focus on spending at a sustainable rate to create a margin for savings.

  • Use budgeting apps to track and age your money over time.


Achieving financial stability requires a clear understanding of your goals, a simplified budgeting approach, regular monitoring, realistic expectations, and a focus on spending within your means. By addressing these common budget problems, you can take control of your finances and work towards building a secure financial future.


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Additional Support with HM Accounting:

For personalized guidance on budgeting and financial wellness, consider exploring HM Accounting. A free 30-minute Discovery Call is available to help you kickstart your budgeting journey.


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